Portugal ends Golden Visas, curtails Airbnb rentals to address housing crisis

Portugal announced on Thursday a 900-million-euro package of measures to tackle a housing crisis, including the end of its controversial "Golden Visa" scheme and a ban on new licenses for Airbnbs and other short-term holiday rentals.

Portugal is one of the poorest countries in Western Europe. More than 50 per cent of workers earned less than 1,000 euros per month last year while rents and house prices have skyrocketed. In Lisbon alone, rents jumped 37 per cent in 2022.

Low salaries, a red-hot property market, policies encouraging wealthy foreigners to invest and a tourism-dependent economy has for years made it hard for locals to rent or buy, housing groups say. Portugal's 8.3 per cent inflation rate has exacerbated the problem.

Prime Minister Antonio Costa told a news conference the crisis was now affecting all families, not just the most vulnerable.

It is not clear when the measures, worth at least 900 million euros ($962.19 million), will come into effect. Costa said some would be approved next month and others will be voted on by lawmakers.

A mechanism would be introduced to regulate rent increases, he added, and the government will offer tax incentives to landlords who convert tourism properties into houses for locals to rent.

New licenses for tourism accommodations, such as Airbnbs, will be prohibited - except in less populated rural areas.

To address the housing shortage, Costa said the state would rent vacant houses direct from landlords for a period of five years and put them on the rental market.

Portugal's golden visa programme, which offers EU passports to non-EU nationals in return for investments including in real estate and has been criticised for sending house prices and rents up, will end, Costa said.

The scheme attracted 6.8 billion euros in investment since its launch in 2012, with the bulk of the money going into real estate.

Housing groups said the measures would mean little if the government continued to promote other policies to attract wealthy foreigners to Portugal, such as the "Digital Nomads Visa" introduced in October, which gives foreigners with high monthly income from remote work to live and work from Portugal without paying local taxes.

At a small housing protest in Lisbon, 23-year-old activist Andreia Galvao accused the government of failing to live up to promises it made to address the housing crisis in the past.

"The goal was that by 2024 all Portuguese would have access to quality housing - it doesn't look like that will happen," she said. "The situation is dramatic."

($1 = 0.9354 euros)